Correlation Between Microsoft and Blackrock Munivest
Can any of the company-specific risk be diversified away by investing in both Microsoft and Blackrock Munivest at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Microsoft and Blackrock Munivest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Blackrock Munivest, you can compare the effects of market volatilities on Microsoft and Blackrock Munivest and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Microsoft with a short position of Blackrock Munivest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Blackrock Munivest.
Diversification Opportunities for Microsoft and Blackrock Munivest
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Blackrock is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Blackrock Munivest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Munivest and Microsoft is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Microsoft are associated (or correlated) with Blackrock Munivest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Munivest has no effect on the direction of Microsoft i.e., Microsoft and Blackrock Munivest go up and down completely randomly.
Pair Corralation between Microsoft and Blackrock Munivest
Given the investment horizon of 90 days Microsoft is expected to generate 2.11 times more return on investment than Blackrock Munivest. However, Microsoft is 2.11 times more volatile than Blackrock Munivest. It trades about 0.03 of its potential returns per unit of risk. Blackrock Munivest is currently generating about 0.03 per unit of risk. If you would invest 41,631 in Microsoft on August 30, 2024 and sell it today you would earn a total of 668.00 from holding Microsoft or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Blackrock Munivest
Performance |
| Timeline |
| Microsoft |
| Blackrock Munivest |
Microsoft and Blackrock Munivest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Blackrock Munivest
The main advantage of trading using opposite Microsoft and Blackrock Munivest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Blackrock Munivest can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blackrock Munivest will offset losses from the drop in Blackrock Munivest's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Blackrock Munivest vs. MFS Investment Grade | Blackrock Munivest vs. Eaton Vance National | Blackrock Munivest vs. Blackrock Muniholdings Closed | Blackrock Munivest vs. Blackrock Muniyield Quality |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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